Annual state spending growth

AN ACT Relating to limiting annual state spending growth to 1
median worker wage growth, with excess revenues dedicated to property 2
tax relief; amending RCW 84.55.010; adding new sections to chapter 3
43.135 RCW; and adding a new section to chapter 82.33 RCW.4
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF WASHINGTON:5
NEW SECTION. Sec. 1. A new section is added to chapter 43.135 6
RCW to read as follows: 7
CREATING A STATE EXPENDITURE LIMIT. (1) Beginning with the fiscal 8
year starting July 1, 2026, the state may not expend from the general 9
fund and related funds during any fiscal year state moneys in excess 10
of the state expenditure limit established under this chapter.11
(2) The state treasurer may not issue or redeem any check, 12
warrant, or voucher that results in a state general fund or related 13
funds expenditure for any fiscal year in excess of the state 14
expenditure limit established under this chapter. A violation of this 15
subsection constitutes a violation of RCW 43.88.290 and subjects the 16
state treasurer to the penalties provided in RCW 43.88.300.17
(3) The state expenditure limit for any fiscal year is the 18
previous fiscal year's state expenditure limit increased by a 19
percentage rate that equals the annual spending growth cap.20
S-0392.2
SENATE BILL 5151
State of Washington 69th Legislature 2025 Regular Session
By Senators Gildon, Braun, Christian, Fortunato, Warnick, and J.
Wilson
Prefiled 01/07/25. Read first time 01/13/25. Referred to Committee
on Ways & Means.
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(4) For purposes of computing the state expenditure limit for the 1
fiscal year beginning July 1, 2026, the phrase "the previous fiscal 2
year's state expenditure limit" means the total state expenditures 3
from the state general fund and related funds for the fiscal year 4
beginning July 1, 2025, plus the annual spending growth cap.5
(5) By December 1, 2025, and by each December 1st thereafter, the 6
economic and revenue forecast council shall calculate the annual 7
spending growth cap for each fiscal year of the current biennium and 8
the ensuing biennium. 9
(6) The definitions in this subsection apply throughout this 10
section and sections 2 and 3 of this act unless the context clearly 11
requires otherwise. 12
(a) "Annual median wage" means the median hourly wage, 13
unadjusted, for all industries except the federal government, as 14
determined by the state employment security department.15
(b) "Annual spending growth cap" means the average of the sum of 16
annual median wage growth for each of the prior 10 fiscal years.17
(c) "Related funds" has the same meaning as provided in RCW 18
43.88.055(2)(c). 19
NEW SECTION. Sec. 2. A new section is added to chapter 43.135 20
RCW to read as follows: 21
ADDRESSING ACCOUNT SHIFTS. (1) If the cost of any state program 22
or function is shifted from the state general fund or related funds 23
to another source of funding, or if moneys are transferred from the 24
state general fund or related funds to another fund or account, the 25
legislature must lower the state expenditure limit to reflect the 26
shift. For the purposes of this section, a transfer of money from the 27
state general fund or related funds to another fund or account 28
includes any state legislative action taken that has the effect of 29
reducing revenues from a particular source, where such revenues would 30
otherwise be deposited into the state general fund or related funds, 31
while increasing the revenues from that particular source to another 32
state or local government account. This subsection does not apply to: 33
(a) The dedication or use of lottery revenues under RCW 34
67.70.240(1)(c), in support of education or education expenditures; 35
(b) a transfer of moneys to, or an expenditure from, the budget 36
stabilization account; or (c) a transfer of moneys to, or an 37
expenditure from, the connecting Washington account established in 38
RCW 46.68.395. 39
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(2) If the cost of any state program or function and the ongoing 1
revenue necessary to fund the program or function are shifted to the 2
state general fund or related funds on or after January 1, 2026, the 3
state budget outlook work group must increase the state expenditure 4
limit to reflect the shift unless the shifted revenue had previously 5
been shifted from the general fund or related funds.6
NEW SECTION. Sec. 3. A new section is added to chapter 82.33 7
RCW to read as follows: 8
DETERMINING PROPERTY TAX RELIEF. (1) By December 1, 2027, and by 9
each December 1st thereafter, the economic and revenue forecast 10
council shall calculate the amount of estimated revenues deposited in 11
the general fund and related funds in excess of the state expenditure 12
limit for the prior fiscal year. 13
(2) By December 31, 2027, and December 31st of each year 14
thereafter, the department must reduce the property tax rate imposed 15
by RCW 84.52.065 for property tax collections for the next succeeding 16
calendar year by the amount calculated in subsection (1) of this 17
section. 18
(3) The definitions in section 1 of this act apply to this 19
section, unless the context clearly requires otherwise.20
Sec. 4. RCW 84.55.010 and 2021 c 207 s 10 are each amended to 21
read as follows: 22
(1) Except as provided in this chapter, the levy for a taxing 23
district in any year must be set so that the regular property taxes 24
payable in the following year do not exceed the limit factor 25
multiplied by the amount of regular property taxes lawfully levied 26
for such district in the highest of the three most recent years in 27
which such taxes were levied for such district, excluding any 28
increase due to (e) of this subsection, unless the highest levy was 29
the statutory maximum rate amount, plus an additional dollar amount 30
calculated by multiplying the regular property tax levy rate of that 31
district for the preceding year by the increase in assessed value in 32
that district resulting from: 33
(a) New construction; 34
(b) Increases in assessed value due to construction of wind 35
turbine, solar, biomass, and geothermal facilities, if such 36
facilities generate electricity and the property is not included 37
elsewhere under this section for purposes of providing an additional 38
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dollar amount. The property may be classified as real or personal 1
property; 2
(c) Improvements to property; 3
(d) Any increase in the assessed value of state-assessed 4
property; and 5
(e) Any increase in the assessed value of real property, as that 6
term is defined in RCW 39.114.010, within an increment area as 7
designated by any local government in RCW 39.114.020 provided that 8
such increase is not included elsewhere under this section. This 9
subsection (1)(e) does not apply to levies by the state or by port 10
districts and public utility districts for the purpose of making 11
required payments of principal and interest on general indebtedness.12
(2) The requirements of this section do not apply to:13
(a) State property taxes levied under RCW 84.52.065(1) for 14
collection in calendar years 2019 through 2021; and15
(b) State property taxes levied under RCW 84.52.065(2) for 16
collection in calendar years 2018 through 2021. 17
(3) For the purposes of determining the levy limit under this 18
section for a state property tax levy, the highest amount of regular 19
property taxes levied in the three most recent years must be 20
determined as if no reduction is made pursuant to section 3 of this 21
act.22
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